Posted August 31, 2020
Many employers offer employees a variety of health insurance benefits. Dental and vision insurance are popular, and employees and their families widely use the coverage. However, even though dental and vision benefits are typically easier to understand than medical benefits, both employers and employees admit that they don’t always understand their coverage. Also, many find the terms used in insurance plans confusing.
Recently, Ameritas partnered with Arizent to gather insights into employers’ and employees’ understanding of dental and vision benefits.
Employers usually provide details about the benefits they offer to help employees understand their coverage options. But sometimes, those details are difficult for both employers and employees to understand.
The Arizent survey asks employers to identify employees’ understanding of their benefits. For dental insurance, employers thought that about 88% of employees had a high understanding of their coverage. But when employees answered this same question, only 64% said they did. For vision plans, employers said 87% of their employees highly understood their coverage. But only 7% of employees said they actually do.
Tip: Employers should check employees’ understanding of benefits information before distributing it to all employees. Set up a small focus group of workers from different areas and generations. Ask for feedback on the materials you want to share. Find out if any details are confusing, if any terms are unfamiliar, or if they have questions about the coverage after reading the materials. Contact your benefits carrier to find answers to their questions. Define terms they don’t understand using simple language, and make descriptions easy to read so employees can find the information they need.
Knowing out-of-pocket costs
Before scheduling a dental or vision procedure, people want to know the amount insurance will cover, and the amount they’ll pay out of pocket. It’s important to understand several key plan requirements.
Copayment, coinsurance – A copayment is the set amount the member pays at each doctor’s appointment. In comparison, coinsurance is defined as the percentage insurance will pay after the plan member meets the deductible. The Arizent survey revealed that employees were more likely than employers to know how a copayment works. But employers were more familiar with the term coinsurance.
Annual maximum – Most dental plans have a maximum yearly coverage limit. This is known as an annual maximum benefit. Members are responsible for costs over this amount.
The study showed that more employees than employers knew the meaning of a dental annual maximum. Regarding the specific amount of the annual maximum, about 25% of employers thought it was $25 or less. The average dental plan annual maximum is typically between $1,000 to $2,000. About 66% of employees didn’t know their plan’s annual maximum amount.
Deductible, premium – What’s the difference between an insurance deductible and premium? About 33% of employers and employees surveyed knew that a deductible is an amount that plan members must pay before insurance starts to pay. In contrast, more employees than employers knew that the premium is the amount paid for insurance each month.
Specifically, for dental insurance, the majority of employees surveyed believe that they have no deductible, or don’t know. For vision insurance, the majority of employers believe the plan deductible is $10 or less. However, most employees don’t know if they have a vision insurance deductible.
Tip: Employers should work with their insurance representatives to educate employees on plan coverage. They can explain to employees how they can estimate the cost of a dental or vision procedure in advance. The rep can provide detailed information on all aspects of coverage for employees and their family members. Make sure members have access to, and can log in to, secure benefits portals that outline their benefit coverage.
Knowing what is covered
Some employers offer medical plans with combined dental and/or vision coverage. Other businesses provide medical benefits, and also stand-alone dental and vision plans.
The survey asked participants to identify dental and vision services and materials covered by medical plans, and those covered by stand-alone dental and vision plans. For vision insurance, employees thought more services and procedures were covered by vision plans than medical plans with vision coverage. However, employers believed that both vision and medical insurance cover many vision care services.
There were similar perceptions of medical insurance coverage for dental services and materials. Employers were more likely than employees to believe that medical plans covered all dental procedures.
Tip: Most medical insurance plans with dental or vision benefits cover only a portion of the costs for preventive exams. Other dental and vision procedures and services may not be covered unless the medical deductible is paid first. For first-day access to dental or vision benefits, employees need a stand-alone plan that is separate from medical insurance.
Overall, employers showed a better understanding than employees of how vision coverage works. Employers correctly indicated that vision insurance offers the most savings on procedures and materials with an in-network eye doctor. They also knew that the deductible applies to all covered eye care procedures, premiums don’t count toward the plan deductible, and preventive services – such as eye exams – usually do not have a deductible.
For dental insurance, most employees surveyed did not know the services covered by their plan. Over 50% knew that they had coverage for cleanings and X-rays, but were not sure whether other procedures were included. But employers indicated that they were aware of the full range of services covered by dental insurance.
Finding the best way to share benefits information with employees is critical for employers. The Arizent study showed that the top five ways employers communicate benefits are: promoting them on the insurance company’s website, sending emails, sharing information on their online HR portal, scheduling in-person seminars or personal appointments with the insurance providers, and distributing printed benefits materials.
Employees in all age groups prefer learning about dental and vision benefit choices on their employer’s websites. Boomers are more likely than younger employees to prefer print materials over emails.
Tip: Employers can use these ideas to refine their employee benefits communications strategy. One key way is to improve educational materials by distributing information in a variety of ways to reach employees in each generation group. Learn more ways to communicate benefits to employees.
The Arizent online survey was conducted in Spring 2020 with 150 employers and 513 employees from four generations.